African Journal of Business Management Vol.6 (6), pp.

2137-2142, 15 February, 2012

Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM11.1610
ISSN 1993-8233 2012 Academic Journals

Full Length Research Paper

Relationship between human resource (HR) practices

and perceived performance of psychiatry nurses in
Ghana
Michael Asiedu Gyensare 1 and Joan-Ark Asare 2
1
Department of Educational Foundations, University of Cape Coast, Cape Coast, Ghana.
2
Department of Classics and Philosophy, University of Cape Coast, Cape Coast, Ghana.
Accepted 20 September, 2011

The fundamental thrust of this study is to examine the impact of three HR practices which are
compensation practices, performance evaluation practices and promotion practices on perceived
performance of psychiatry nurses in the mental hospitals in Ghana. Data was collected through a time
tested questionnaire from 130 nurses from Ankaful and Accra Psychiatric hospitals in Ghana. Pearson
correlation and multiple regression analyses were used to measure the impact of HR practices on the
performance of nurses. The results of the correlation indicated a positive relationship between
compensation practices and perceived employee performance at 0.05 level of significance. Again, the
study revealed a positive correlation at 0.01 level of significance between performance evaluation
practice, promotion practices, and employee perceived performance. Multiple regression analysis
2
showed that 12% (R =0.122) of the variance in perceived employees performance was accounted for by
the three HR practices. The psychiatry section of the Ghana Health Service needs to pay special
attention to these three HR practices in order to enhance the performance of nurses.

Key words: Human Resource (HR) practices, employee performance, psychiatry nurses, developing country,
Ghana.

INTRODUCTION

Studies on human resource (HR) practices and its impact
on employee performance have been carried out and
reported by several investigators including those of Guest
(2002), Harley (2002), Gould-Williams (2003), Park et al.
(2003), Wright et al. (2003) and Tessema and Soeters
(2006). The focus of these studies have always been
towards developed countries, with little or no research
having been done to test the link between HR practices
and employees performance in developing countries like
Ghana. Besides, most of these researches have focused
on employee performance in different areas rather than
the health sector. Thus, the impact of these HR practices
on the performance of nurses is not yet known in a
*Corresponding author. E-mail:
reverend_nayasjnr@yahoo.com. Tel: (+233)0244863135.
developing country like Ghana. This is what the present
study hopes to investigate.
Ankaful and Accra psychiatric hospitals are two out of
the three most prominent mental hospitals in Ghana,
housing almost two-thirds of the mentally insane patients
in the country. Thus, the welfare of these mentally insane
patients is vested in the hands of the caretakers (nurses)
in the psychiatric hospital. In this situation, it is imperative
to find out the determinants which can possibly enhance
the performance of psychiatry nurses in these psychiatric
hospitals. The objective of this study is to assist the
decision makers in the mental hospitals to follow the HR
practices which can improve the performance of
psychiatry nurses. The present study could also be
helpful to human resource managers in the health sector
in Ghana for formulation and development of HR prac-
tices that will ensure a high level of health practitioners
performance resulting in increased achievement in their
2138 Afr. J. Bus. Manage.
daily routine activities.
LITERATURE REVIEW
A number of human resource (HR) practices could be
tested in relation to employee performance in a particular
work place. Available literature indicates that HR
practices are positively related to organizational and
employee performance. For instance, Shahzad et al.
(2008) in their study titled impact of HR practices on
perceived performance of university teachers in Pakistan
reported a positive significant relationship between three
HR practices (that is, compensation, perceived employee
performance and promotion practices) and employee
performance.
Tessema and Soeters (2006) tested the relationship
between eight HRM practices and performance of
employees in Eriteria civil service. These HR practices
included recruitment and selection practices, placement
practices, training practices, compensation practices,
employee performance evaluation practices, promotion
practices, grievance procedure and pension or social
security. They found a significant relationship between
HRM practices and perceived employee performance.
Huselid (1995) used eleven HRM practices in his study
which are personnel selection, performance appraisal,
incentive compensation, job design, grievance proce-
dures, information sharing, attitude assessment, labour-
management participation, recruitment efforts, employee
training and promotion criteria. Huselid (1995) found a
significant relationship between high work practices such
as compensation and employees outcome. This study
unlike Shahzad et al. (2008) examines the impact of
three HR practices (that is, compensation, performance
evaluation and promotion practices) on perceived perfor-
mance of psychiatry nurses in Ghana. Like Pakistan,
Ghana is a developing country with a very low per capita
income and these three practices which have a relatively
direct impact on financial earnings and social standing of
an individual may be considered as the major determi-
nants of employees performance. It is against this
background that these three practices have been chosen
for the study.
Compensation Practices
Baloch et al. (2010), in their study on HR practices and
employee performance in the banking sector, found a
positive correlation between compensation practices and
performance of bankers in the North-West Frontier
Province (NWFP), Pakistan. They therefore, cautioned
that the management of private and public sector banks
should pay particular attention to compensation practice
in order to increase the performance of their employees.
Again, Tessema and Soeters (2006) also reported a
statistically significant relationship between compensation
practices and perceived employee performance.
Shahzad et al. (2008), Tessema and Soeters (2006),
Huselid (1995) and Frye (2004) examined the
relationship between equity based compensation and firm
performance and found a positive relationship between
the two. Frye (2004) further argued that for human capital
intensive institutions, compensation plays a crucial role in
attracting and retaining highly skilled employees. As the
health sector is a human capital institution, compensation
practices can be of great help in retaining highly skilled
and competent nurses. On the basis of the foregoing
discussion, it is worth-noting that compensation practices
are correlated with the performance of employees.
However, there is the need to test and establish the
relationship between the two variables.
Performance evaluation practices
Brown and Heywood as cited in Shahzad et al. (2008)
opine that performance appraisal represents, in part, a
formalized process of worker monitoring and is intended
to be a management tool to improve the performance and
productivity of workers. Thus, employee commitment and
productivity can be improved with performance appraisal
systems (Brown and Benson, 2003). Tessema and
Soeters (2006) and Baloch et al. (2010) also found a
positive correlation between performance evaluation
practices and employee performance. They therefore,
alerted employers of employees in the private and public
sector banks to take performance appraisal practices
very seriously since they lead to a higher job satisfaction
and greater influence of productivity.
Promotion practices
A considerable amount of research has been done con-
cerning the relationships between human resource (HR)
practices and employee performance. Ahmad and
Schroeder (2003), and Hilderbrand and Grindle (1997)
found a positive correlation between promotion oppor-
tunities and motivation of employees to give out their
best. Tessema and Soeters (2006), and Shahzad et al.
(2008) as well as Baloch et al. (2010) all found a positive
relationship between promotion practices and perceived
employee performance. Truss (2001) affirmed that
financially successful companies like Hewlett-Packard
promote and develop from within. Park et al. (2003) are
of the view that synergetic systems of HR practices
including merit-based promotion decisions brings about a
higher performance of an organization. Thus, it is signifi-
cant arguing here that promotion practices are correlated
with employee performance. Nonetheless, the

relationship needs to be tested and established with
nurses working in the psychiatric hospitals in Ghana.
Going by the aforementioned arguments, the following
hypotheses are formulated.
Research hypotheses
H1: There is a statistically significant relationship between
compensation practices and perceived performance of
psychiatry nurses in Ghana.
H2: There is a statistically significant relationship between
performance evaluation practices and perceived
performance of psychiatry nurses in Ghana.
H3: There is a statistically significant relationship between
promotion practices and perceived performance of
psychiatry nurses in Ghana.
RESEARCH METHODOLOGY
A correlational research design formed the framework for this study.
This design was chosen on the basis that it is appropriate when
attempting to examine the relationship between variables without
determining cause and effect (Bluman, 2001).
This type of design (Bluman, 2001) can be used to determine the
magnitude and direction of the relationship between two or more
quantifiable variables. Again, the correlational research design is
not subject to the same types of threats to internal and external
validity that can affect experimental research.
The participants included full time registered nurses drawn from
two (that is Ankaful and Accra psychiatry hospitals) out of the three
psychiatric hospitals in Ghana randomly.
The participants were made up of staff nurses, senior staff
nurses, senior nursing officers, principal nursing officers and the
deputy director. A total of 145 questionnaires were distributed to
the two hospitals. Ninety (90) questionnaires along with a cover
letter and fifty-five (55) questionnaires were personally administered
by the researchers at Ankaful and Accra psychiatry hospitals
respectively. However, eighty-three (83) questionnaires showing a
response rate of 92.2% were returned from Ankaful psychiatry
hospital and forty-eight (48) questionnaires returned from Accra
mental hospital with a response rate of 96%. Only one
questionnaire returned from Ankaful psychiatry hospital was
incomplete and therefore excluded in the analysis.
Tessema and Soeters (2006) questionnaire for measuring the
impact of HR practices on employee performance was adapted for
the study. The questionnaire consisted of employee performance (4
items), compensation practices (6 items), performance evaluation
practices (6 items) and promotion practices (3 items). Responses
were measured on a 5 point Likert scale ranging from 1=strongly
disagree to 5=strongly agree. All scales showed a good reliability as
illustrated in Table 1.
RESULTS AND DISCUSSION
The background information on respondents is presented
in frequency tables. Pearson correlation matrix and multi-
ple regression analysis were used respectively to verify
the impact of HR practices on perceived performance of
psychiatry nurses in Ghana.
The raison d'tre for including the background
Micheal and Joan-Ark 2139
information of participants is not to find out their
relationship with employee performance but rather to
indicate the composition of respondents in order to have
a better understanding of their responses and the result
for this study. From Table 2, majority of the respondents
(46.2%) were within the age group of 20 - 25 years
whereas only 3 respondents representing 2.3% were
within the age category of 41 - 45 and 46 - 50 years,
respectively. Again, majority (72.3%) of the respondents
were single with only 27.7% being married. As regards
gender, the females outweighed their male counterparts
with a percentage of 60.0 as to 40.0, respectively.
Majority of the nurses in the two selected psychiatric
hospitals were diploma holders. Finally, the demographic
data indicates that majority of the participants has less
than 6 years tenure in their respective institutions.
Unlike Baloch et al. (2010), Shahzad et al. (2008) and
Tessema and Soeters (2006) who found a positive rela-
tionship between compensation practices and employee
performance at P<0.01 level, the results of the correlation
matrix in Table 3 revealed that there is a significant
positive correlation between compensation practices and
perceived performance (r=0.18, P<0.05) of psychiatry
nurses in Ghana. This finding is in concord with Frye
(2004) who examined the relationship between equity
based compensation and firm performance and found a
positive relationship between the two. Ghana has a very
low per capita income and therefore majority of her
employees in the public sector institutions including
psychiatry nurses will prioritize compensation to any other
thing. The result indicates that nurses performance in the
Ghanaian mental hospitals is affected by compensation
practices.
Performance evaluation practices were also found to
have a significant positive impact on perceived
employees performance (r=0.33, P<0.01). This finding is
consist with that of Baloch et al. (2010) and Tessema and
Soeters (2006) who found values of (r=0.54, P< 0.01)
and (r=0.65, P<0.01) respectively. This may be because
in the health sector, employee performance evaluation
could serve as a means for taking proper personnel
actions such as salary increment, promotion and other
incentives. Again, it could also act as a way of assessing
the strengths and weaknesses of employees and taking
the necessary training and development measures
(Ostroff and Bowen, 2000; Baron and Kreps, 1999;
Kalleberg and Moody, 1994; Pfeffer, 1994). However, the
finding of this present study contradicts that of Shahzad
et al. (2008) who found no significant relationship between
employees performance evaluation practices and their
perceived performance.
Similarly, promotion practices were also significantly
correlated with employee performance in the psychiatry
hospitals in Ghana (r=0.26, P<0.01). Baloch et al. (2010)
and Shahzad et al. (2008) found values such as (r=0.51,
P<0.01) and (r=0.56, P<0.01) respectively which supports
the finding of this study. The finding of the study is also
2140 Afr. J. Bus. Manage.

Table 1. Reliability coefficients.

Cronbachs alpha
Perceived employee performance 0.61
Compensation practices 0.86
Promotion practices 0.71
Performance evaluation practices 0.74

Table 2. Background information.

Variable Descriptions Frequency Percent

20-25 60 46.2
26-30 37 28.5
31-35 7 5.4
Age 35-40 6 4.6
41-45 3 2.3
46-50 3 2.3
51 and above 14 10.8

Married 36 27.7
Marital status
Single 94 72.3

Male 52 40.0
Gender
Female 78 60.0

Certificate 30 23.1
Diploma 91 70.0
Qualification
First degree 8 6.2
Masters degree 1 .8

<1 12 9.2
1-5 82 63.1
6-10 18 13.8
Tenure
11-15 5 3.8
16-20 3 2.3
20 and above 10 7.7
N=130.

Table 3. Correlation between HR practices and employees performance.

Mean SD EP CP PEP PP
EP 14.72 2.72 1
CP 17.58 6.38 0.176* 1
PEP 20.07 4.32 0.334** 0.636** 1
PP 10.27 2.51 0.257** 0.446** .565** 1
*,Correlation is significant at the 0.05 level; **,Correlation is significant at the 0.01 level;
N=130; SD= Standard deviation, EP= Employee performance; CP= Compensation
practices; PEP= Performance evaluation practices; PP= Promotion practices.

consistent with that of Tessema and Soeters (2006) who that promotion does not only offer a position with more
found a coefficient of (r=0.48, P<0.01). It is worth noting status and power but also intrinsically motivates the

Figure 1. Proposed theoretical model for the study.
employee since promotion goes with some form of fringe
benefits. Hence, the performance of psychiatry nurses in
Ghana is greatly affected by promotion practices and
therefore needs to be taken seriously by the HR
department in the mental health department of the Ghana
Health sector.
To investigate the relationship between HR practices
and the performance of psychiatric nurses in Ghana, an
enter multiple regression method for analysis was
conducted to evaluate how well HR practices variables
predicted employee performance among psychiatry
nurses in Ghana. The linear combination of the three HR
practices was significantly related to employee
performance, F (3, 126) =5.81, P=0.001. The value of R2
=0.122 indicates that 12% of the variance in perceived
employees performance can be accounted for by
compensation practices, performance evaluation
practices and promotion practices.
The assumption of linearity, homoscedasticity and the
independence of residuals were checked for the multiple
regression equation by examining the residual
scatterplot. The residual plot shows that data are fairly
linear and homoscedastic, because it is rectangular, with
a concentration of points along the centre. The study
therefore found that there was no serious violation and as
such will not significantly impact the result of the multiple
regression equation (Figure 1).
Linear equation model
Using the regression coefficients for the three indepen-
dent variables compensation practices, performance
Micheal and Joan-Ark 2141
evaluation practices and promotion practices, and the
constant term given under the column labeled B in Table
4, the ordinary least squares (OLS) equation for
predicting employee performance will be:
Employee performance= 10.015+ (-0.033) (CP) + (0.202)
(PEP) + (0.120) (PP)
On the other hand, using the values given under the
column labeled Beta, the regression (or OLS) equation, if
all the three independent variables (CP, PEP and PP) are
converted to z scores will be as follow:
ZEmployee performance= (-0.077) (ZCP) + (0.320) (Z PEP) +
(0.110) (Z PP).
Note: If all variables are in standardized (Z score) form,
the Y-intercept (constant term) will always be zero. This,
therefore, accounts for the reason why we do not get a
constant term under the Beta column in Table 4.
Conclusions
This paper concludes that all three independent variables
which are compensation practices, performance evalua-
tion practices and promotion practices showed a
significant positive relationship with perceived employee
performance, which implies that, given a successful
implementation of these HR practices, the psychiatry
hospitals can achieve the maximum contribution of its
employees. The study therefore, enjoins the government
and the HR department of the Ghana health services and
2142 Afr. J. Bus. Manage.

Table 4. Multiple regression analysis.

Model B Beta t Sig.

Constant 10.015 8.640 0.000
Compensation practice -0.033 -0.077 -.705 0.482
Performance evaluation practice 0.202 0.320 2.705 0.008
Promotion practice 0.120 0.110 1.077 0.283

R 0.349
2
R 0.122
2
Adjusted R 0.101
Standard Error of the Estimates 2.582
F-value 5.814
Sig. 0.001
N 130

the Ministry of Health as well as all stakeholders of the
psychiatric hospitals in Ghana to pay particular attention
to these three HR practices in order to command the
utmost performance from its workers especially nurses, in
the psychiatric hospitals in Ghana.
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